The sponge iron industry in Karnataka, the southwestern state of India, which accounts for about 22 percent of the state's total iron and steel industry, suffers from acute shortage of the key raw material, iron ore, according to media reports. A majority of sponge iron units have already been shut down.
The total iron ore requirement of iron and steel industry in the state stands at around 33 million mt per year at 80-85 percent of capacity utilization. The integrated steel plants are currently running at 68 percent of capacity utilization and pig iron units are running at 21 percent.
As SteelOrbis previously reported, in September 2012, the Supreme Court has lifted the mining ban on 18 ‘Category A' mines in Karnataka. However, it is expected to take up to six months for the steel mills to go back to normal production capacity. On the other hand, ‘Category B' and 2 ‘Category C' mines have not been allowed to restart operations.